AudioCodes Reports First Quarter 2014 Results

April 29, 2014 --

LOD, Israel, April 30, 2014 (GLOBE NEWSWIRE) -- AudioCodes (Nasdaq:AUDC), a leading provider of converged voice solutions that enable enterprises and service providers to transition to all-IP voice networks, today announced financial results for the first quarter period ended March 31, 2014.

First Quarter 2014 Highlights:

Revenues totaled $36.0 million, an 11.4% increase over the year ago quarter

Quarterly networking revenues increased 15.0% year-over-year

GAAP net loss of $278,000, or $(0.01) per diluted share

Non-GAAP net income of $1.1 million, or $0.03 per diluted share

$29.7 million in new capital, net of expenses of the offering, raised through public offering of ordinary shares

Approval of a 100 million NIS (approximately $29 million) three-year development plan and budget participation by the Israeli office of the Chief Scientist for a new cloud computing and unified communications research and development center

Revenues for the first quarter of 2014 were $36.0 million, compared to $36.3 million for the fourth quarter of 2013 and $32.3 million for the first quarter of 2013.

Net loss in accordance with U.S. generally accepted accounting principles (GAAP) was $278,000, or $(0.01) per diluted share, for the first quarter of 2014, compared to GAAP net income of $2.8 million, or $0.07 per diluted share, for the fourth quarter of 2013, and GAAP net income of $71,000, or $0.002 per diluted share, for the first quarter of 2013.

Non-GAAP net income for the first quarter of 2014 was $1.1 million, or $0.03 per diluted share, compared to $1.9 million, or $0.05 per diluted share, for the fourth quarter of 2013, and $691,000, or $0.02 per diluted share, for the first quarter of 2013.

Non-GAAP net income (loss) excludes: (i) stock-based compensation expenses; (ii) amortization expenses related to intangible assets; and (iii) non-cash deferred tax expenses. A reconciliation of net income (loss) on a GAAP basis to a non-GAAP basis is provided in the tables that accompany the condensed consolidated financial statements contained in this press release.

During the first quarter of 2014 the company raised approximately $29.7 million in net proceeds from the public offering of 4,025,000 ordinary shares, including 525,000 shares sold pursuant to the underwriters' exercise in full of their over-allotment option, at a purchase price of $8.00 per share.

Net cash provided by operating activities for the first quarter of 2014 totaled $1.9 million. Cash and cash equivalents, bank deposits and marketable securities were $94.0 million as of March 31, 2014 compared to $62.3 million as of December 31, 2013 and $57.5 million as of March 31, 2013. This increase was primarily a result of the receipt of the net proceeds of the public offering in March 2014.

"We started 2014 in a strong position, with double-digit first quarter revenue growth, as well as improved non-GAAP net income, compared to the same quarter last year. This growth was driven by the continued strength of our unified communications and wide-area voice networking business and services," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. "We experienced good results from our marketing and sales activities in our key business lines, including the Microsoft Lync UC solution, session border controllers and our One Voice for Broadsoft initiative. We introduced new cutting-edge products and solutions including the Mediant 9000 high capacity SBC, and launched the One Voice for Lync Operations Center solution which substantially improves the ability of an enterprise to deploy and operate high performance, high quality voice network solutions. We also expanded our cloud-enabled solutions with the roll-out of One Voice for Enterprise Mobility, as well as our new VocaNOM cloud-based voice dialing software. These offerings strengthen our ability to provide comprehensive solutions for the fast growing segments of unified communications, business services and contact centers."

"During the quarter we successfully completed a public offering of our ordinary shares, raising net proceeds of $29.7 million. This offering further strengthened our balance sheet and provided us with enhanced flexibility to pursue strategic growth opportunities. To further support our innovation pipeline, we recently announced plans for a new Cloud Delivery Network Architecture (CDNA) Research and Development Center with a three-year budget of 100 million NIS (approximately $29 million) to be supported by the Israeli Office of the Chief Scientist. This new R&D center is expected to provide a highly efficient platform to develop new cutting edge cloud-based technologies, infrastructure and services to enable the delivery of real-time communications, as well as value-added services. These positive developments continue to further our strong foundation for AudioCodes' growth in the years ahead," concluded Mr. Adlersberg.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 9:00 A.M., Eastern Time today to discuss the Company's first quarter 2014 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one the following numbers:

United States Participants: +1 (877) 407-0778

International Participants: +1 (201) 689-8565

The conference call will also be simultaneously Web cast. Investors are invited to listen to the call live via Web cast at the AudioCodes corporate website at www.audiocodes.com.

Statements concerning AudioCodes' business outlook or future economic performance; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements'' as that term is defined under U.S. Federal securities laws. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to: the effect of global economic conditions in general and conditions in AudioCodes' industry and target markets in particular; shifts in supply and demand; market acceptance of new products and the demand for existing products; the impact of competitive products and pricing on AudioCodes' and its customers' products and markets; timely product and technology development, upgrades and the ability to manage changes in market conditions as needed; possible need for additional financing; the ability to satisfy covenants in the Company's loan agreements; possible disruptions from acquisitions; the ability of AudioCodes to successfully integrate the products and operations of acquired companies into AudioCodes' business; and other factors detailed in AudioCodes' filings with the U.S. Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.

Note: Non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. The Company believes that non-GAAP information is useful because it can enhance the understanding of its ongoing economic performance and therefore uses internally this non-GAAP information to evaluate and manage its operations. The Company has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results and because many comparable companies report this type of information.

Note: Non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. The Company believes that non-GAAP information is useful because it can enhance the understanding of its ongoing economic performance and therefore uses internally this non-GAAP information to evaluate and manage its operations. The Company has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results and because many comparable companies report this type of information.

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands

Three months ended

March 31,

2014

2013

(Unaudited)

Cash flows from operating activities:

Net income (loss)

$ (278)

$ 71

Adjustments required to reconcile net income or losses to net cash provided by or used in operating activities:

Depreciation and amortization

856

782

Amortization of marketable securities premiums and accretion of discounts, net